Spanish Bank Backs Decentralised Bitcoin Exchange Coinffeine

Spanish bank Bankinter has made an investment in Coinffeine, a bitcoin startup launched in June by four engineers aiming to create a new distributed exchange platform.

The investment, made through the Bankinter Innovation Foundation, is one of the first in the bitcoin ecosystem, according to the bank.

Coinffeine

is developing a distributed platform for the exchange of fiat money by cryptocurrencies in a secure and anonymous environment. It is designed to let users send fiat money and transfer bitcoins outside banks in a peer-to-peer (P2P) fashion.

BitTorrent for your bitcoins

The Coinffeine desktop app, which the company likens to "BitTorrent for your bitcoins", is scheduled to launch next January.

"The big innovation here is the Coinffeine protocol, a mathematical model based on Game Theory. This protocol ensures the safety of the fiat-bitcoin exchange without a trusted third party and in an automated way, offering the same experience as a traditional exchange even though the transactions are really P2P," the company said in a statement.

Coinffeine co-founder Sebastián Ortega told CoinDesk the platform will provide customers with a service that combines the existing financial infrastructure with a distributed exchange.

Ortega explained:

"Coinffeine lets you keep ownership of your bitcoins in a way that only a distributed exchange can provide. You don't need to trust anyone, not even us, for the safeguard of your coins and you can reuse the existing financial infrastructure for handling the fiat payments."

Ortega said the platform features an "astounding security model" and provides customers with a number of benefits, including low fees.

"You only need to pay for the payment processor fees and enhanced privacy and more flexibility, as exchanges between end-users are subject to less legal burdens across the globe," said Ortega.

Coinffeine's client

Coinffeine said Bankinter’s strategy is to support the startup and also become one of its main clients in the future. The company said it could not disclose the exact amount of funding it received via the Bankinter Innovation Foundation.

However, the non-profit foundation usually invests €25,000-€200,000 in promising startups. Dedicated to promoting entrepreneurship and innovation in Spain, it is funded exclusively by Bankinter.

"Bankinter Innovation Foundation invest in products and services that relate to its business ecosystem and, when possible, wants to be a first friendly early-adopter customer that helps the startup to develop," explained Ortega. "In the case of Coinffeine, we are still working on finding the best collaboration framework to make it happen."